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Preliminary results for the year ended 31 December 2018

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Research article

The logistics and industrial market in the South West

Abstract

There are a number of sizeable requirements across the region being discussed and we anticipate significant activity in the second half of the year

Former Lidl, Weston Super Mare

TABLE 6 | Key stats Source: Savills Research

Supply

There is currently 1.90 million sq ft available across nine units in the South West region, this is an increase of 32% from the end of 2017. This has been caused by the addition of two units to supply in 2018. These are the former Lidl unit in Weston-Super- Mare which comprises 314,658 sq ft and Groundwell Distribution Centre in Swindon where 149,173 sq ft is available.

Each size band is fairly well catered for in the South West, there are three units available over 300,000 sq ft. The largest being Cribbs Causeway Distribution Centre where 384,768 sq ft is available. Aside from the aforementioned former Lidl unit all the available units are either located in Bristol or Swindon.

FIGURE 18 | Supply by gradeSource: Savills Research

Take-up

Take-up in the South West has been subdued in H1 2018 with only 375,286 sq ft transacted across a single unit. This was B&Q leasing a build to suit unit at G Park Swindon which will be adjacent to their current facility at the scheme.

The lack of deals in the region can be partly attributed to the lack of supply, with limited units for occupiers to lease. Although there were two units added to the market at the end of H1 2018 which could result in an uptick in letting activity towards the end of the year.

FIGURE 19 | Take-upSource: Savills Research

Development pipeline

There are three units under construction in the South West totalling 389,769 sq ft. All of the units being speculatively developed are concentrated in the 100,000-200,000 sq ft size band; the average size for units under construction is 129,923 sq ft.

All the units under construction are located in Bristol which will mean the supply constraints that are present in the other markets in the region will persist in the short term.